February 14, 2017 11:24 amPublished by Stephen Pryce
When you are involved in buying a property and there are multiple offers, it’s best to keep your feet planted on the ground because the bank may say “no deal”! This does happen, especially now in the US, where banks were badly burned in the bubble of 2006–2007. Back in those crazy days, wildly inflated home appraisal values were routinely submitted to the banks, so that virtually any breathing applicant would qualify for a mortgage. The consequences were disastrous. But even in normal, stable markets like Canada’s, a large asking-selling discrepancy could spell trouble for the purchaser. Since institutional lenders (banks) lend a percentage of the appraised value of the home, a low appraisal can make it hard or impossible for the purchaser to put together the financing. Assume you buy a home for $400,000 and put 20 per cent ($80,000) down. You need... View Article
What is CMHC Mortgage Loan Insurance? Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price. Mortgage loan insurance helps protect lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment starting at 5%* — with interest rates comparable to those with a 20% down payment. To obtain mortgage loan insurance, lenders pay an insurance premium. Typically, your lender will pass this cost on to you. The premium payable is based on a percentage of the home’s purchase price that is financed by a mortgage. The premium can be paid in a single lump sum or it can be added to your mortgage and included in your monthly payments. Mortgage loan insurance is not to be confused with mortgage life insurance which guarantees... View Article
Is 2017 the year that the sizzle starts to sputter on the Toronto region’s overheated real estate market? That’s possible, says John Pasalis, of data-digging brokerage Realosophy near Queen and Leslie Sts. “As the craziness continues, I suspect that might trigger some bigger changes,” he said in reference to government measures already implemented this year such as more rigorous stress testing of lending qualifications.”I suspect that Ottawa or the province are only going to be fine with 30 per cent year-over-year appreciation (in housing prices) for so long before they do something else that’s drastic,” he said. Here’s what other industry experts are predicting: Interest rates The inching up of interest rates and more stringent mortgage rules are among the factors that could play a role in tempering sales in the hot Toronto region market, says Jason Mercer, director of... View Article
